WeBuyCars lists on JSE for R7.82 billion

WeBuyCars Dome

WeBuyCars has listed on the JSE with a market capitalisation of R7.82 billion after it was unbundled by Transaction Capital. 

The company’s 417,181,120 shares began trading on the JSE this morning at 09:00. 

There was great demand for the shares, with the JSE saying they had not seen such activity around a listing in years. This resulted in the share’s opening above the pre-listing price of R18.75. The first shares were traded at closer to R20 per share.

Following WeBuyCars’ separate listing, Transaction Capital has disposed of all of its shares in the company and unbundled to its shareholders. 

Transaction Capital has no shares in the company after the listing, while founders Faan and Dirk van der Walt will retain 10% of the company’s shareholding after the listing. 

Since its founding in 2001, WeBuyCars has shown tremendous growth, from two employees selling a handful of cars monthly to 2,800 employees selling over 14,000 vehicles monthly. 

Most impressively, its growth has been entirely organic – not once did the company raise debt to fund its growth. Rather, it relied entirely on the profits generated by the business.

Transaction Capital acquired a stake in WeBuyCars in 2020, buying up 49.9% of the company to take a non-controlling position for R1.8 billion. 

Since then, WeBuyCars has gone from one success to another, increasing its trading volume over ten times since the investment. 

However, Transaction Capital has come under immense pressure due to other parts of its business, particularly SA Taxi, struggling to recover post-Covid. 

This pushed the company into a corner, forcing it to sell off parts of its business to repay some of its debt.

As part of this, Transaction Capital announced it would unbundle its stake in WeBuyCars and list it separately on the JSE to reduce its debt and focus on its other businesses. 

Financial performance

Before listing WeBuyCars, Transaction Capital outlined the company’s performance over the past five months and compared it to the same period in 2023. 

This showed the company is still growing rapidly, but it also reflected the tough economic environment in South Africa, with cash generated declining compared to the previous period. 

While revenue and earnings grew by 16% and 25%, respectively, the cash generated from operations declined by 24%. 

The company’s cost-to-income ratio has also increased markedly over the past few years, from 49.5% in 2022 to 64% in at the end of February 2024. 

All the while, WeBuyCars has continued to grow the number of cars it buys and sells impressively. 

For the five months to the end of February, the company managed to buy 68,209 cars and sell 66,276 – increasing its inventory by 19%.

This means that WeBuyCars sells around 13,225 cars per month. Despite being a shorter month in February, it sold 13,132 units. 

Transaction Capital said the sales per-day volumes remain in line with January 2024, and the momentum continues into March. 

The company reported a profit of R778 million in its latest annual results.